'Desperate' need for new deal on flood insurance

Insurance time bomb: more flooding could spell serious trouble for the future of home insurance

Devastating flooding in mid-Wales, parts of Yorkshire and along England's south coast last
week has prompted fresh calls for a better deal on insurance.

Many
property owners around Aberystwyth, Ceredigion, had no insurance having
struggled to find cover. The local council has set up an emergency fund to
help.

Homeowners in other flood risk areas are worried they could be left
without cover next year.

A voluntary promise from insurers to provide at
least some flood cover - albeit often with high premiums and big excesses -
expires in June 2013.

The industry is now bogged down in negotiations with the
Government to agree a replacement deal. Without one, an estimated 200,000 homes
could be left vulnerable.

Paul Cobbing, chief executive of the National
Flood Forum charity, says: 'The latest floods highlight the desperate need for
the Government to make a decision on a sustainable model for insurance.

'It
promised a decision in the spring, but we've heard nothing yet.'

The
insurance industry has put forward several options, but wants the Government to
bankroll some of the cost.

The Department for Environment, Food and Rural
Affairs, which is in charge of flood policy, says: 'Taxpayers' money is best
spent on long-term solutions that prevent flooding in the first place rather
than on subsidising insurance.'